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Portfolio Standard Deviation Meaning Formula Examples How to Calculate
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http://youtube.com/watch?v=NeRIn_qHWqE
In this video on Portfolio Standard Deviation, here we discuss its definition and learn how to calculate the standard deviation of the portfolio (three assets). • ๐๐ก๐๐ญ ๐ข๐ฌ ๐๐จ๐ซ๐ญ๐๐จ๐ฅ๐ข๐จ ๐๐ญ๐๐ง๐๐๐ซ๐ ๐๐๐ฏ๐ข๐๐ญ๐ข๐จ๐ง? • -------------------------------------------------------------------- • Portfolio Standard deviation is the standard deviation of rate of return on an investment portfolio and is used to evaluate an investment's intrinsic volatility • ๐๐ง๐ญ๐๐ซ๐ฉ๐ซ๐๐ญ๐๐ญ๐ข๐จ๐ง ๐จ๐ ๐๐ญ๐๐ง๐๐๐ซ๐ ๐๐๐ฏ๐ข๐๐ญ๐ข๐จ๐ง ๐จ๐ ๐๐จ๐ซ๐ญ๐๐จ๐ฅ๐ข๐จ • ----------------------------------------------------------------------------------------- • #1 - A high standard deviation from the portfolio shows the high risk from the portfolio and the return is more volatile in nature as well as unstable. • #2 - A small standard deviation portfolio means less volatility and more stability in portfolio yields and is a very helpful economic metric when comparing various portfolios. • ๐๐ญ๐๐ฉ๐ฌ ๐ญ๐จ ๐๐๐ฅ๐๐ฎ๐ฅ๐๐ญ๐ ๐๐จ๐ซ๐ญ๐๐จ๐ฅ๐ข๐จ ๐๐ญ๐๐ง๐๐๐ซ๐ ๐๐๐ฏ๐ข๐๐ญ๐ข๐จ๐ง • ------------------------------------------------------------------------------------ • Step 1 - Find the standard deviation in the portfolio for each asset. • Step 2 - Find the weight of each asset in the overall Portfolio. • Step 3 - Find the correlation between the Portfolio's assets. • Step 4 - Apply the values in the above-mentioned to derive the standard deviation formula of a two Asset Portfolio. • To know more about the ๐๐จ๐ซ๐ญ๐๐จ๐ฅ๐ข๐จ ๐๐ญ๐๐ง๐๐๐ซ๐ ๐๐๐ฏ๐ข๐๐ญ๐ข๐จ๐ง, you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐๐ซ๐:- https://www.wallstreetmojo.com/portfo... • Connect with us! • Youtube โบ / @wallstreetmojo • LinkedIn โบ / mycompany • Facebook โบ / wallstreetmojo • Instagram โบ / wallstreetmojoofficial • Twitter โบ / wallstreetmojo
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